Kenya's industrilization

Ever thought about why African countries import just about everything while so many brilliant ideas originating from citizens do not get to see the light of day? We came up with edge cutting  technologies such as M-pesa that revolutinized businesses globally and put us on the world map. We built a pan-african logistics firm Jumia that got the attention of Fortune 500 investors and became the first african tech startup to be listed on the NewYork Stock Exchange. Kaoshi peer-to-peer international money transfer, PAYG LPG, Sign-IO by Allela, Air to water harvesting machines, Cardio pad- a touchscreen heart-monitoring tablet, CAT scan technology are all african inventions that went and will go ahead to be adopted and commercialised by western countries. Which then begs the question, where is Africa failing in industrilization?

Close to home, Kenya imports $17.1B goods annually mainly in the following categories as analysed by the Observatory of Economic Complexity (OEC) https://oec.world/en/visualize/tree_map/hs92/import/ken/all/show/2017/

  • Footwear and headwear- $74.9M
  • Machinery- $3.23B
  • Clothes/apparels/textiles- $852M
  • Animal and vegetable byproducts- $630M
  • Raw dry foods- $904M
  • Paper goods -$500M
  • Plastics and rubbers- $873M
  • Wood products- $56M

Many industries and companies are closing shop in Kenya due to the stiff competitition brought about by the influx of cheap imports in the market. Simple commodities like fish and eggs which the Kenyan farmer can comfortably produce in bulk and feed the nation end up being sold for way below the production costs.

A number of firms with Kenyan origins and many more with subsidiaries are under receivership due to financial tax burdens imposed on local companies and harsh business environment. Mumias sugar, Webuye Pan paper mills, Rivatex, Chase bank, Nakumatt, ARM cement, Deacons East Africa and most recently Keroche Breweries have all felt the noose tightening on their operations. We could argue that mismanagement played a factor too but isn't it time we examined our business policies and the damage we are doing to our economy?

Visit a supermarket or grocery shops across all counties and you will find goods from overseas ranging from matchboxes, toothpicks, soft drinks, new and second hand clothes, belts, innearwear, bags, stationery, personal care products, packed raw foods, household gadgets, toys, solar panels and implements, packaging materials, fruits etcetera , almost all of which could be manufactured locally.

In 2017 Kenya imported $17.1B, making it the 75th largest importer in the world. During the last five years the imports of Kenya have increased at an annualized rate of 3.7%, from $14.2B in 2012 to $17.1B in 2017( OEC).  In 2017 Kenya exported $6.17B, making it the 101st largest exporter in the world. During the last five years the exports of Kenya have increased at an annualized rate of 4.4%, from $4.89B in 2012 to $6.17B in 2017 (OEC). Economically speaking, Kenya is operating at a negative balance of trade.

If as a country we are not close to being able to manufacture heavy machinery and motor vehicles, and yet we are importing many other basic consumer goods which could be manufacured locally, what does that say about our economy now and in the future? What will be our role in the global business markets outside of buying and borrowing? Does it mean that we have no more inventions that are Truly Kenyan or Proudly African? Are we condemned to the unfortunate position of being a market for the developed world's third rate products?

Do we have a say in this? Are we our own problem by not supporting locally made goods and holding them to a poor standard in comparison to their foreign made counterparts? Will our governments rescue us from the dangerous direction of total de-industrilization? Do citizens have a say in reversing this?

Written by Agano Tradecraft on Saturday May 2, 2020

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